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100% FDI allowed for townships with residential, educational and
recreational facilities on a case to case basis and Franchise for basic
telephone service in SEZ.
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Income Tax benefits under 80 IA
to developers for any block of 10 years in 15 years. |
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Duty free import / domestic
procurement of goods for development, operation and maintenance of SEZ. |
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Exemption from Service Tax /
CST. |
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Income of infrastructure capital fund / co. from
investment in SEZ exempt from Income Tax. |
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Investments made by individuals etc in a SEZ co are
eligible for exemption u/s 88 of IT Act. |
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Developer permitted to transfer infrastructure
facility for operation and maintenance. |
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Generation, transmission and
distribution of power in SEZ allowed. |
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Freedom in allocation of space & built up area to
approved SEZ units on commercial basis. |
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Authorized to provide and maintain services like
water, electricity, security, restaurants and recreation centers on commercial
lines. |
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| What
are the incentives / facilities available for SEZ units? Top |
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| SEZ enterprises can avail of the
following incentives / facilities |
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Customs
and Excise:
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SEZ units may import
or procure from domestic sources, duty free, all their requirements of capital
goods, raw materials, consumables, spares, packing materials, office equipment,
DG sets etc. for implementation of their project in the Zone without any
license or specific approval.
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Duty free import /
domestic procurement of goods for setting up of SEZ units.
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Goods imported /
procured locally duty-free can be utilized over the approval period of 5 years.
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Domestic sales by
SEZ units will be exempt from SAD.
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Domestic sale of
finished products, by-products on payment of applicable Custom duty.
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Domestic sale
rejects and waste and scrap on payment of applicable Custom duty on the
transaction value.
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Income
tax:
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Physical export
benefit. |
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100% IT exemption
(10A) for first 5 years and 50% for 2 years thereafter. |
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Reinvestment
allowance to the extent of 50% of ploughed back profits. |
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Carry forward of
losses |
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Foreign
Direct Investment:
Top
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100% foreign direct investment
under the automatic route is allowed in manufacturing sector in SEZ units
except arms and ammunition, explosive, atomic substance, narcotics and
hazardous chemicals, distillation and brewing of alcoholic drinks and
cigarettes, cigars and manufactured tobacco substitutes.
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No cap on foreign
investments for SSI reserved items. |
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Banking / Insurance/External
Commercial Borrowings. |
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Setting up Off-shore Banking Units
(OBU) allowed in SEZ. |
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OBU allowed 100%
Income Tax exemption on profit for 3 years and 50% for the next two years.
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External commercial borrowings by
units up to USD 500 million a year allowed without any maturity restrictions.
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Freedom to bring in export
proceeds without any time limit.
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Flexibility to keep 100% of export
proceeds in EEFC account and freedom to make overseas investment from it.
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Commodity hedging permitted.
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Exemption from interest rate
surcharge on import finance.
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SEZ units allowed to 'write-off'
unrealized export bills. |
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Central
Sales Tax Act:
Top
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| Exemption to sales made from
Domestic Tariff Area to SEZ units from Income Tax Act. |
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Service
Tax:
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| Exemption from Service Tax to SEZ
units |
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Environment:
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SEZs permitted to have
non-polluting industries in IT and facilities like golf courses, desalination
plants, hotels and non-polluting service industries in the Coastal Regulation
Zone area.
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Exemption from public hearing
under Environment Impact Assessment Notification.
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Companies
Act:
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Enhanced limit of INR 2.4 crores
per annum allowed for managerial remuneration. |
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Agreement to opening of Regional
office of Registrar of Companies in SEZ. |
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Exemption from requirement of
domicile in India for 12 months prior to appointment as Director. |
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Drugs
and Cosmetics: Top
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Exemption from port restriction
under Drugs & Cosmetics Rules. |
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Sub-Contracting / Contract Farming. |
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SEZ units may sub-contract part of
production or production process through units in the Domestic Tariff Area or
through other EOU / SEZ units. |
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SEZ units may also sub-contract part
of their production process abroad. |
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Agriculture / Horticulture
processing SEZ units allowed to provide inputs and equipments to contract
farmers in DTA to promote production of goods as per the requirement of
importing countries. |
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Whether
SEZ have been exempted from Labour laws?
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| Normal Labour Laws are applicable
to SEZs, which are enforced by the respective State Governments. State
Governments have been requested to simplify the procedures / returns and for
introduction of a single window clearance mechanism by delegating appropriate
powers to Development Commissioners of SEZ. |
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What
are the facilities for Domestic suppliers to Special Economic Zone? Top
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| Supplies from Domestic Tariff Area
(DTA) to SEZ to be treated as physical export and the DTA supplier would be
entitled to: |
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Drawback / DEPB. |
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CST Exemption. |
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Exemption from State Levies. |
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Discharge of EP if any on the
suppliers. |
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Income Tax benefits as applicable
to physical export under section 80 HHC of the Income Tax Act. |
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What
are the special features if we come to SEZ?
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| The units would be entitled for a
package of Incentives and a simplified operating environment. |
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What
about the Licenses for Imports?
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| No License is required for imports,
including second hand machineries. |
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Will
goods bought from DTA attract State Sales Tax and Excise?
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| No. State has exempted sales from
DTA to SEZ from local levies and taxes. |
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Top |
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